CIPD Calls on UK Government to Invest in HR Support for SMEs to Boost Productivity

The UK has something of a productivity problem, consistently ranking among the worst in Europe in this regard over the past few years. There have been many initiatives and novel approaches designed to counteract this issue, but now the Chartered Institute of Personnel and Development (CIPD) is calling on the UK government to put their money where their mouth is and invest in HR schemes for small businesses as part of the wider effort.

The call-for-action comes off the back of a recent evaluation of the year-long People Skills pilot programme, an initiative developed by the CIPD alongside the JPMorgan Chase Foundation which provides up to two days’ worth of free HR support to small firms. This includes face-to-face advice, a telephone helpline, online information and templates, as well as group training events.

A recent evaluation of the programme found that the scheme does in fact provide a basis for boosting productivity in the workplace, despite the fact that the programme focuses on providing fairly basic support such as establishing workers’ terms and conditions or job descriptions.

Ben Willmott, CIPD Head of Public Policy, said, “People Skills shows the potential benefits of targeted investment to improve small firms’ capability around the management of people through co-ordinated high-quality, locally-delivered business support via channels such as Local Enterprise Partnerships, chambers of commerce and local authorities.”

As such, he is calling on the UK government to provide just that.

The evaluation report further stated that the People Skills programme improved people’s perception of and feelings towards a company in regards to workplace relations, labour productivity and financial performance, as compared to other similar firms in the sector.

Willmott continued, “If policy makers are serious about addressing the UK’s long-standing productivity deficit - particularly among the nearly 1.3 million small businesses that employ between 1 and 50 people - then they have to start seriously thinking about how to improve management quality, which the Bank of England’s chief economist Andy Haldane has identified as a key area for focus.

“People Skills provides a template of how to actually do this on the ground among small businesses. We calculate that about £40m from the Government’s National Productivity Investment Fund would support the £13m annual cost of running a People Skills-type service across all 38 Local Enterprise Partnerships in England for three years and could revolutionise the quality of business support for small firms.”

Other key findings of the evaluation, as reported by Workplace Insight, are as follows:

• Online business support is inadequate unless supplemented by personalised advice and support, with face-to-face advice particularly valued by small business owners and managers.
• Existing fragmented business support provided at a local level should be rationalised to prevent duplication of provision and confusion among SMEs.
• Policy makers need to re-think how they encourage SMEs to employ and train young people, in the workplace, for example through apprenticeships, as in most cases they don’t have the interest or capability to do this.
• The support provided by People Skills did not disadvantage existing private sector providers as owner managers participating in People Skills had not previously accessed HR support services.

Sam Bonson

Sam is an aspiring novelist with a passion for fantasy and crime thrillers. He is currently working as a content writer, journalist & editor as he continues to expand his horizons.